What is the true impact of the West Coast labor showdown on U.S. agricultural exports?
There is no question that exports are being hurt due to port delays stemming from the months-long, acrimonious and still-unresolved negotiations between West Coast dockworkers and management. The media have been filled since late last year of stories of lost sales of everything from apples to christmas trees. But the precise impact is subject to heated debate.
An analysis of PIERS data shows evidence of a decline in containerized exports of agricultural goods through West Coast ports, especially toward the end of last year when delays tied to the labor standoff were most widespread.
Over the course of the year, total agriculture and foodstuff exports nationwide were up 2 percent to 789,000 TEUs, while exports through West Coast ports were down 3 percent. In December specifically, the U.S. in total saw a 7 percent decline in TEU volumes, while the West Coast saw a 13 percent decline and the East Coast saw a 10 percent increase. That suggests that many shippers found alternative routes to export markets.
Looking specifically at vegetables exported via container, December saw an 18 percent overall TEU increase versus December 2013. The West Coast saw a 14 percent increase and the East Coast saw a 62 percent increase. In the category of fruits and nuts, in December, the West Coast saw a 6 percent increase and the East Coast, a 7 percent increase.
But there is controversy over other data, as a California-based economist claims that estimates of a massive drop-off in exports through West Coast ports last fall published by a trade group are way overblown. The Agriculture Transportation Coalition, a Washington, D.C., trade group, said containerized agricultural exports through West Coast ports dropped 40 percent in September, 42 percent in October and 50 percent in November, versus the prior-year months. The analysis, which the AgTC says is based on multiple sources of data, does not include December figures.
Jock O’Connell, an international trade economist affiliated with Beacon Economics in Los Angeles, said a different picture emerges from Census Bureau export figures for agricultural goods moving through West Coast ports. He said containerized exports off the West Coast of meat (Harmonized System Chapter 02), vegetables (HS 07), fruits and nuts (HS 08), and seeds (HS 12) “were up in all four months (from September through December), often by sizable margins.
“Census Bureau export statistics do not in the least paint the same calamitous picture AgTC is sketching,” O’Connell said.
Peter Friedmann, executive director of the AgTC, said, “That statement (that containerized ag exports haven’t dropped) is delusional. We are presenting over the next five days letters from over 1,000 ag interests in just Oregon, Washington and California to members of Congress confirming the injury incurred by ag exporters. To dismiss this pain and suffering in the ag sector in such cavalier fashion demonstrates an astounding lack of compassion.”
Others have remarked on pressures agriculture exporters are facing. In testimony before the Senate Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security on Tuesday, Norman Bessac of Cargill Pork said the impact of the port issues are severe:
“Recently, the industry has been experiencing delays of two to three weeks on chilled product as ships and product have backed up in the West Coast ports. With this delay, our Asian customers cannot count on a dependable supply of U.S. beef and pork, so they have started to cancel orders and are looking to suppliers in Chile, Australia and the European Union to meet their needs,” he said.
A major U.S. agriculture exporter to Asia said it’s running on half its normal capacity because it’s unable to book vessel capacity and get empty containers back to marine terminals on time. As a result, the shipper said it’s losing business to Australian and Canadian competitors.
“We are seeing damage not only to ourselves, but to the customers we are supposedly serving,” said the executive who asked to remain anonymous. “This damage is not only financial, but also to the reputation of shippers on the West Coast.”